U.S. Imposes New Sanctions on Putin Cronies

Apr 06 2018

The Trump administration imposed new sanctions on seven of Russia’s richest men and 17 top government officials on Friday in the latest effort to punish President Vladimir V. Putin’s inner circle for interference in the 2016 election and other Russian aggression.

Among those sanctioned are Oleg V. Deripaska, an oligarch who once had close ties to Mr. Trump’s former campaign manager, Paul Manafort; Kirill Shamalov, an energy executive who married Mr. Putin’s daughter, Katerina Tikhonova; and Viktor Vekselberg, chairman of the Renova Group, a Russian investment firm.

Kemerovo, the place where corruption kills

Mar 30 2018

You probably haven’t heard of Kemerovo. It’s understandable if you haven’t, it isn’t exactly Paris or London.

Keremovo is a city in Russia located 255 km (158 mi) from Novosibirsk, the biggest city in Siberia and Russia’s third largest behind Moscow and St. Petersburg. Slightly over 500,000 live in the industrial city of Kemerovo.

On March 25, 2018, a fire ripped through the “Winter Cherry” mall and theatre complex in the city. According to the BBC, the fire started somewhere on an upper floor in the mall, during school holidays. The complex, which had multiple movie theatres, a bar, cafe, and a bowling alley, was packed and bustling.

While the cause of the fire isn’t known yet for sure, two speculative answers are floating around.

“Senior regional official Vladimir Chernov was quoted as saying the fire probably began in the children’s trampoline room on the top floor of the four-story building.

“The preliminary suspicion is that a child had a cigarette lighter which ignited foam rubber in this trampoline room, and it erupted like gunpowder,” he said.

However, Rossiya 24 TV, a national broadcaster, said an electrical fault was the most likely cause – as in most previous deadly fires in Russia.”

President Vladimir Putin visited Kemerovo and blamed “criminal negligence and sloppiness” for the disaster.

The scenes were heartbreaking.

A Russian man spoke to a crowd of indignant protesters in the city center on the 27th of March, which had been declared a day of mourning. He detailed the last words he spoke to his daughter before she fell victim to the blaze. His last words to the crowd were interrupted by his own tears. The protesters called for an investigation into the disaster and for local officials to resign.

Rumors are swirling around. Official numbers claim 64 people died and that 27 are still missing, but some are adamant that the death toll is much higher, perhaps as high as 300. Despite the history of deceit and propaganda which has come from authorities and the state media in Russia, this has not yet been confirmed. In fact, Meduza, a Russian and English paper based in Riga which is generally quite critical of the Kremlin and President Putin, lays out a comprehensive list of reasons why the rumors of the death toll being much higher than reported may not be true.

Even if the official figures are not found to be entirely accurate, there is still a problem to be discussed among the Russian people in the wake of this horrific disaster.

The disaster in Kemerovo is a symptom of two much larger and much more grim problems than a simple building fire. First, corruption in Russia is a rampant epidemic. Transparency International ranks Russia 135th out of 180 in its corruption index, on par with countries such as Mexico, Guatemala, and Bangladesh. While corruption is arguably not as bad as it was in Russia under former President Boris Yeltsin, the issue is still a common scapegoat for Russia’s internal issues or inefficiencies.

Yet little ever seems to be accomplished regarding corruption. The current government, while occasionally offering words of encouragement to anti-corruption efforts, does not seem particularly interested in resolving the issue on a national scale. “Not as bad as it was under President Yeltsin” is a low expectation to set and an even lower one to declare the status quo.

Corruption has been a problem in the Kremlin long before Vladimir Putin ever considered running for office. It started to rear its ugly head on a nationwide scale under hardliner Premier Leonid Brezhnev in the 1970s. The planned economy, still being heralded as the superior system to the perceived excesses and hedonism of capitalism, had become rife with redundancies, waste and an endless bureaucracy. It had started to stagnate and rot from within. Reformist Premier Mikhail Gorbachov tried to right the ship, but his reforms largely backfired and contributed to mounting instability which eventually became a major reason for the collapse of the Soviet Union. It only grew and spread under Yeltsin as his ineffective and wildly unpopular government fruitlessly attempted to reform the Russian economy from the smoldering ashes of the collapsed planned economy.

And here we are, in Vladimir Putin’s eighteenth year of power. While rushing to blame Putin as if he was the one to personally start the fire is excessive, it may be time to seriously address a different, intangible problem that is related to the stubborn corruption present in Russia: apathy.

Russians and their Eastern European counterparts are often stereotyped as stoic peoples who grimly go about their lives, rarely smiling unless something unexpectedly wonderful happens or they’ve had a few drinks. Unfortunately, this stereotype can sometimes translate to the political arena. Russians are generally supportive of democracy in theory, but the brain drain, poverty, crime and lost identity that came to define the 1990s soured many Russians’ opinions on the new system of government. Political apathy, while found everywhere, is especially recognizable and tangible in today’s Russia.

While Russia in the 1990s was more democratic than it is now or was under communism, “more” is a relative, and in this case, marginal term. When people are represented by a government which struggles to complete even basic functions, the power and freedom that democracy is supposed to extend to the people of a sovereign state are difficult to realize.

This was a problem in the United States before its constitution was written as well. Between the end of the American Revolution in 1783 and the ratification of the Constitution in 1789, the United States was governed by the Articles of Confederation, a sort of prototype constitution that decentralized government to an extreme degree. While life was freer under the Articles that it was under the British Crown, the new government was so ineffective that it proved difficult to realize and celebrate these freedoms.

Eighteen years after Vladimir Putin swept his way into power, he remains the ever-dominant figure in Russian politics. While the Russian economy surged between 2000 and 2007, it has been sluggish or in serious recession since then. President Putin is starting to be compared to Leonid Brezhnev, as while life is generally stable and steady, corruption and apathy are rampant in a sluggish, stagnant state.

That’s where the Russian people can come in and make a difference.

The Kemerovo Disaster was a horrific disaster which could have been prevented. It’s easy to lay the blame at those directly involved, and they are right to be reprimanded. There is no excuse for the alleged negligence of those in the direct vicinity: the security who failed to pull or fix the fire alarm, those who decided to lock the theater doors, and the bogus inspection of the building’s procedures and preparedness for an emergency.

These livid protesters are calling for accountability, a basic tenet of representative government. For years the Kremlin has failed to deliver that. It’s not healthy to fall back into the complacency that life is stable and quiet-society requires an active and invested populace. Another reason for Kemerovo’s disaster was the under-funded fire department: Russia’s wealth, unfortunately, is mostly focused on Moscow and St. Petersburg. Proposed investments in the smaller cities are slow to come if ever.

Russia does not necessarily need photogenic pictures of millions in the streets demanding reform or even revolution as was seen in Ukraine in 2013 and 2014. What it needs, at least as a first step, is for its people to demand accountability on a grand scale. It’s time to stop brushing off corruption as a fact of life-reform is difficult but it certainly is not impossible. Kemerovo was not the first fire disaster in contemporary Russia, but if the people are willing to demand accountability, disasters like this can be prevented or at least substantially controlled so there is less to grieve.

by Kyle Menyhert

Election postmortem

Mar 22 2018

In the wake of the presidential elections in Russia, experts in Washington came together this week at the Atlantic Council and the Kennan Institute to discuss what the future may hold. While observers largely expect further stagnation, confrontation with the West and increasing authoritarianism, some believe Russia’s civil society may take people by surprise.

All of the presidential candidates running in Russia’s elections understood exactly what kind of game they were playing – “Putin fighting with no one but himself,” said Lilia Shevtsova of Chatham House, speaking at the Atlantic Council on Monday.

With eight names on the ballot, said Vladimir Kara-Murza of Open Russia, “in reality, there was still the one.” “It is not difficult to win an election when your opponents are not actually on the ballot,” he said, referring to slain opposition leader Boris Nemtsov and Alexei Navalny, who was banned from participating in the election.

While the true opposition candidates were kept away from the election, the alternatives offered to voters on the ballot could not be taken seriously, said Ekaterina Schulmann of the Russian Presidential Academy of National Economy and Public Administration, speaking at the Kennan Institute on Tuesday.

Experts have widely said that voting fraud, such as ballot-stuffing and multiple voting, were commonplace in Russia’s elections, even if there were fewer reported irregularities than in previous years. However, as political analyst Dmitry Oreshkin noted, the tactics have changed, with less of a focus on the ballot box and more on the manipulation of people, which is very similar to Soviet methods.

There has been a “mobilization” of regional leaders and employers, said Schulmann, referring to pressure put on employees at both state and private companies as well as students to vote. This “dependent electorate” helped boost turnout, which was more of a concern for the Kremlin than the outcome of the election, added Schulmann.

Alexander Vershbow of the Atlantic Council said that although there is some genuine support of Putin, it remains “shallow” and this election wasn’t a “very impressive performance” in light of the absence of the competition, ridicule of other candidates and coercion to boost turnout.

A new level of dictatorship

Experts speaking at the Atlantic Council and the Kennan Institute this week agreed there haven’t been democratic elections in Russia since 2004, when Putin was re-elected for his second presidential term. The Kremlin has increasingly gained control over the country’s regional powers since then, said Oreshkin, with the regions beginning to compete for Putin’s favoritism. Oreshkin characterized the regions where local elites are highly supportive of Putin as “electoral sultanates,” with 19 such regions in this election, although in the USSR power was even more absolute. “What we have now,” said Oreshkin, “is USSR in miniature”. Looking ahead, the regime will continue using Soviet methods, including a confrontation with the West, he said.

Sergey Parkhomenko of the Kennan Institute described a process of “vote harvesting”. After delivering strong results for Putin, the authorities start to believe in their cause, reinforcing their enthusiasm, said Parkhomenko. “This enthusiasm,” he said, “will become an important factor for Russia after the elections […] The tightening grip that we expect from the Russian regime is to some extent rooted in this strange psychological feeling.”

Political analyst Kirill Rogov said Putin’s official election result of almost 77% is something new for Russia and reflects the degree to which authoritarianism has developed. Rogov said the Kremlin has reached “mature authoritarianism,” where institutions have become so entrenched that the role of a particular leader is secondary. Rogov said that one should look beyond the idea of Putin’s widespread popularity. “It is not about the popularity of one person – it is an institutional issue,” said Rogov.

From left to right: Matthew Rojanksy, the Director of the Wilson Center’s Kennan Institute; Ekaterina Schulmann, Senior Lecturer (associate professor) at the School of Public Policy of the Russian Presidential Academy of National Economy and Public Administration (RANEPA); Kirill Rogov, Political Analyst, Liberal Mission Foundation; Dmitry Oreshkin, political analyst and political geographer; Sergey Parkhomenko, George F. Kennan Expert.

The current political system depends much less on one person than it appears, said Schulmann. “The personalization of the regime, as it seems to me, is highly overestimated,” she said, adding that during the Medvedev’s time as president, there were no major changes to the “political machine”.

Kara-Murza said dictators are known for producing strong elections results, with Egyptian President Hosni Mubarak and Romanian Communist leader Nicolae Ceausescu garnering 89 percent and 98 percent of the votes in elections. However, these numbers neither reflect the reality nor really help the dictators themselves, Kara-Murza said. The Kremlin appears to be terrified of mass protests on the one hand, and on the other hand they ironically leave their citizens no other choice but to take to the streets, he said.

What next?

The Kremlin has found a role for Putin as a “defender of the fatherland,” said Shevtsova, but it has created a conflict between Putin’s agenda and the system. This system is largely dependent on Western finance, resources and technology, and the system also consists of the cronies in the West and “Londongrad”. “Putin has started to undermine the key principles of the current Russian state and the system’s survival,” said Shevtsova. “I would say that President Putin will be presiding over his last chapter”.

Putin also cannot change this system, said Anders Åslund of the Atlantic Council, because the system, with $1 trillion of private money hidden offshore, supports him and those “lower down in the bread line” will stop supporting him if he tries to change it.

Rogov said that the assets owned by political and business elites close to Putin are not secured by anything but Putin’s power. However, Putin himself and his elite are also facing a generational shift, which further complicates the transition dilemma for Putin. Rogov ruled out the idea of a successor for Putin since “even a hand-picked successor such as Medvedev proved to be a difficult model because it provoked polarization among elites and society.”

It is also questionable whether the public’s acceptance of Putin’s role as “defender of the homeland” will prove sustainable, as the polls show a majority of people would like to see Russia as an economic power first and as a military power second, said Shevtsova. She said there are signs that society is fatigued with the regime and that a “regime without an idea, vision and mission cannot exist for a long time.”

Vershbow said that Putin’s policies will continue to exploit nationalism, at least in the short-term, which is still perceived as a “winning strategy,” based on the perception that Russia is a “besieged fortress” under attack by Western enemies. But, he said, people are becoming more “cautious” about the costs of this policy approach. “The Russian people may buy this in the short term, but I am not sure they are comfortable with this going forward,” said Vershbow. Although economic stagnation could also create public discontent, he doesn’t believe society will “boil to a degree of making changes.”

Kara-Murza and Shevtsova said Russia’s civil society should not be underestimated in their ability to respond to the current regime, although Shevtsova said that “people are demoralized in general after so many years of this zombie propaganda.” She expects political change could happen when the older generation of politicians retires and the Kremlin tries to “fill the vacuum”. A lot depends on the ability of civil society and the new Russian opposition to create resistance, she said.

Kara-Murza noted there are a lot of people, including the young generation, who reject the current regime. “Even if we forget about abuses and corruption, there are those who are tired of the same face on TV […] Don’t underestimate civil society,” he said, pointing to the protests of 2011. Russian history shows that changes may happen rapidly, said Kara-Murza.

By Valeria Jegisman

Nord Stream 2: commercial venture or political tool?

Mar 14 2018

U.S. and European experts weighed the political and business implications of Nord Stream 2 at an Atlantic Council event in Washington on Monday, March 12.

Europe’s demand for gas is rising while production is declining, complicated by the decommissioning of nuclear plants and environmentally damaging coal plants. This has resulted in a need for new energy sources and Russia should not be ruled out, said panelist Brenda Shaffer, a senior fellow at the Atlantic Council.

In Germany, there is strong support for Nord Stream 2 as a business proposition, said Claudia Müller, a member of German Bundestag. Nonetheless, Ms. Müller noted that there have been some 62 meetings concerning the pipeline between the German Chancellor and other high-level politicians.

As such, many experts see Nord Stream 2 not merely as a commercial project, but as a political tool that threatens energy security in Europe, particularly in Ukraine and Eastern Europe.

With the rapid growth of renewable energy and LNG exports, Europe today has a variety of energy options. There is more competition in the energy market, said Agnia Grigas, a senior fellow at the Atlantic Council, and Europe should take advantage of this, whereas Nord Stream 2 would “lock in the European markets.” “I don’t think this is a very commercial project,” Grigas said.

Sandra Oudkirk of the US Department of State agreed, saying “buying into a massive expensive undersea project buys into future dependence on gas.”

Bypassing Ukraine

A divisive factor of Nord Stream 2 is that it proposes to bypass Ukraine, which some say would give Russia a free hand.

“This is a very dangerous free hand to give to Moscow right now,” said Ms. Grigas. “I don’t think this is exactly the time to reward the Kremlin and Gazprom.”

But opposition to Nord Stream 2 is not about punishing Russia, said Douglas Hengel, a senior fellow at the German Marshall Fund, as much as it is about European energy security. “We have to look at what Russia is trying to do here. It is part of an overall plan, I think, to try to weaken the energy union, to weaken the European Union, to weaken the West,” said Hengel.

Yet Ms. Shaffer argued that bypassing Ukraine would in fact be beneficial to its independence, due to Russia’s deep involvement in Ukraine’s energy industry and the latter’s reliance on gas transfer rents.

In this regard, the U.S. policy objective of strengthening Ukraine by blocking Nord Stream 2 is counter-productive, Shaffer said.

While U.S. opposition to Nord Stream 2 might not change Russian foreign policy, said Ms. Oudkirk, it is linked to “Ukraine’s path towards the West and a European future.”

Panelists agreed, however, that the U.S. should not widen its Russia sanctions to Nord Stream 2 unilaterally.

Ms. Müller warned that more U.S. pressure and restrictions on Germany could shift public opinion in Russia’s favor.

Exporting corruption

Another criticism of Nord Stream 2 is that it could spread a culture of corruption. It could have a negative impact on political and business life in Germany, said Ms. Grigas.

“We know when Russia exports its natural gas, it also exports political influence and it also exports corruption,” Grigas said.

Moreover, it is an initiative that strives to “to enrich the Putin circle,” said Anders Aslund, a senior fellow at the Atlantic Council. Just as Gazprom has enriched Putin’s close friends – such as Gennady Timchenko, the Rotenberg brothers, and Yury Kovalchuk, as discussed in a 2008 report by Boris Nemtsov and Vladimir Milov – so, too, will Nord Stream 2 further benefit some of these individuals, Aslund said.

Free Russia Foundation head of research, Ilya Zaslavskiy, also present at the event, said there is already evidence of exporting corruption, as in the case of the Rotenberg brothers, who were beneficiaries of Nord Stream 1, as well as a money-laundering scandal around the Nordic Yards shipbuilding plant, as discussed in Free Russia Foundation’s report.

In his comments and questions to the panels, Zaslavskiy emphasized that independent research shows that Nord Stream 2 is not only about by-passing Ukraine but a whole of Central and Eastern Europe, breaking existing EU directives on Slovakia’s Eurostream and leaving an open question on who will pay for additional transit infrastructure from Germany to Central Europe. More importantly, Nord Stream 2 takes one of the major incentives for Putin not to wage a war of annihilation against Ukraine and creates a dangerous over-dependence on Russian gas via this single vulnerable undersea route that under worst scenarios would carry 70% of all Gazprom deliveries to the EU. In 2014-2015 Putin arbitrarily reduced supplies into Nord Stream 1 in order to prevent reverse gas flows to Ukraine and this is an indication on how political expediency will also drive Nord Stream 2 future operation.

The first panel at the Atlantic Council event included:

Mr. Douglas Hengel, Senior Fellow, The German Marshall Fund of the United States; Professorial Lecturer, Energy, Resources and Environment Program, School of Advanced International Studies, Johns Hopkins University

Although disinformation campaigns are not a new phenomenon in the political toolkit, Russia’s recent tactics and manipulation of social media, have presented governments with new challenges. The solution is a coherent and coordinated response from society as a whole and prompt action by the trans-Atlantic alliance.

An Atlantic Council event on Wednesday, March 7, included the following panelists:

Mr. Fried said the Western response to counter disinformation – which includes overt propaganda, social media manipulation and cyber hacking – must be aligned with democratic values and coordinated with the efforts of the governments, civil society and tech companies.

This type of societal collaboration should also be represented on the trans-Atlantic level, in the form of the “Counter-Disinformation Coalition,” which would be an informal coalition between the U.S. and E.U. governments and non-governmental actors who would develop common norms and best practices. “We are in this together”, said Fried, but acknowledging that Europe has been ahead of the U.S. on countering disinformation.

“It is time to stop admiring the problem and wringing our hands about it”, said Fried calling for prompt action.

Mr.O’Sullivan discussed the need for the public debate to expose disinformation tactics and misuse of social media, stressing the importance of a “whole of society response” in building resilience to disinformation. “There is no silver bullet for governments to sort of pass a law which suddenly makes this problem go away”, said Sullivan.

Dr. Henick of the Global Engagement Agency, established in 2016 to lead U.S. efforts to fight terrorist and foreign propaganda, said that disinformation per se is not a new problem and various U.S. agencies have long been working on it. He dismissed recent claims in the press that his agency remains less active in countering Russian propaganda than was initially foreseen, due to low interest from the State Department and delayed financing. Henick said the shortly expected first $40 million tranches of a much-anticipated funding allocation will allow the agency to “redouble their efforts”, to invest in new technology and empower civil society actors with resources.

“We need to work with strengthening the independent media, to build up resistance, increase digital literacy”, said Henick, adding that debunking false information alone is not sufficient and that he did not support the counter-use of “troll farms”. “The solution to this problem is going to look nothing like the problem itself”, said Henick.

Dr. Polyakova said that, although Russia is at the center of the disinformation discussion, the recommendations provided in the Atlantic Council report are about building a long-term societal resistance to disinformation and interference. “Russia is a starting point, but this is really about much more than just one state actor. It is really about the resilience and resistance that we can build”, said Polyakova.

Ms. Rebegea said that while free speech is a basic right in the European Union, regulations also permit banning media outlets that spread hate speech. This was the case in Lithuania, which first banned Russian TV channel RTR Planeta for three months in 2015 on grounds of inciting hatred in their reporting on Ukraine.

“I think there are ways in which we can preserve democratic values and safeguards”, said Rebegea, “but at the same time to go against these bad actors”.

Among the measures of countering disinformation recommended by the Atlantic Council, is the need to clearly label Russian networks such as RT and their content as propagandistic by both the traditional and social media. Another measure is to stop spreading false news, for instance by having tech companies “mute” and “de-rank” untrustworthy and deceptive content and content from automated accounts. Ms. Polyakova said these measures would help prevent false information from “going viral”, whereas “no one knows where the information came from”. “These kinds of disinformation campaigns can be identified today and they [tech companies] can stop them at the beginning”, said Polyakova.

Some other recommendations outlined in the Atlantic Council report include:

the U.S. should create new governmental agencies with a focus on disinformation,

the U.S. needs to bring transparency to online political ads

Governments and tech companies should support, including financially, civil society organizations, such as StopFake, to expose disinformation.

Governments should implement programs on civic-education and training on media-literacy for the public, with support from civil-society groups and tech companies.

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